Gannett to buy Journal Media Group for $280 million

October 7, 2015 — Fusion DigiNet

Gannett Co., Inc. is to acquire all of the outstanding common stock of Journal Media Group for approximately $280 million, net of acquired cash.

Journal Media Group shareholders will receive cash of $12.00 per share in cash. Based on the closing price of Journal Media Group on October 7, 2015, this represents a premium of 44.6%. Gannett will finance the transaction through a combination of cash on hand and borrowings under Gannett’s $500 million revolving credit facility.

Robert J. Dickey, president and chief executive officer of Gannett said, “The publications of both Gannett and Journal Media Group have a rich history, a commitment to journalism, and a dedication to informing and being active members in the communities we serve. Our merger will combine the best of each of our organizations to create a journalism-led, investor-focused company which will provide substantial value to the shareholders of both companies. This transaction is an excellent first step in the industry consolidation strategy we have communicated to our shareholders and is a good example of the value-creating opportunities we believe are available.”

The combination of Journal Media Group and Gannett will create a portfolio of 106 local markets in the U.S. and will result in a combined digital audience of more than 100 million unique domestic visitors a month. The acquisition will also enable the combined company to realize significant operating efficiencies. The properties in Journal Media Group’s markets will benefit from the consolidated functions Gannett has established over the last several years. Additionally, the regional proximity of some of the Journal Media Group markets will also enable Gannett to further utilize its printing and distribution assets.

Financial Highlights

Adds approximately $450 million to Gannett’s annual revenues.

Adds approximately $60 million of adjusted EBITDA, including over $10 million of immediately available synergies.

Opportunity for approximately $25 million of additional operating synergies to be fully realised over the next two years via the consolidation of corporate and administrative operations, integration with the Gannett shared service centers and consolidation of certain printing and distribution assets in multiple adjacent markets.

Immediately EPS accretive: approximately $0.10 – $0.15 per share in the first full year and $0.20 – $0.25 in the second year.

Strategic Highlights

Adds 15 dailies and 18 weeklies in 14 local markets, in nine states.

Adds daily and Sunday circulation of approximately 675,000 and 950,000, respectively.

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